Strategic Management

Sidra (15121016)

Rida (15121009),

WAC: Sime Darby Berhad (A):1995

Issues:

Human Resource Issues

Stagnant Growth
Whether to acquire or not?

Evaluation of issues:
Sime Darbey human resource was trapped in the problem that they started losing their
employees to the competitors. The reason for increased competition was small population of
Malaysia with good economic growth. Sime was a conglomerate and their employees were
stuck in a place they were not having any job rotation.
Another issue which they were facing was they invested a lot in Malaysia and they felt stuck
there because of less opportunities of growth due to the interest of international markets.
International markets dont respond to the area of interest in which Sime Darbey has invested
in Malaysia. The CEO assures the growth within Malaysia but the managers think that
Malaysia is too small to fulfil the Sime Darbey ambitions and they always have had interest
in Indo-china and Mekong delta but investments are made in Malaysia.
The companys management system was getting complex. The upper management and
directors worked on the plans to diversify further and spent about 1 and half month on the
paper work. They focused on the plans and their implementations and during the meetings of
upper management they mostly discussed the plans and their effect not other factors that
affect their companys reputations. They never focused on the employees and financial issues.
Sime Darby Berhad acquire or not acquire United Malaysian Banking Company (UMBC

Options and evaluations:

Proper definition of SOPs will lessen the conflicts among employees and competitive wage
scale will not allow workers to switch towards employees.

Strategic Management
Sidra (15121016)

Rida (15121009),

Sime Darby Berhad should not acquire United Malaysian Banking Company (UMBC)
because of its internat issues. Company has to make itself strong internally and then focus on
growth strategies. Further, its a slow moving conglomerate. Deregulation of banking sector
had begun in earnest. So in the past UMBC had fallen short of its potential.
Decision of acquiring of the UMBC bank is also not feasible for the Sime Darbey. They are enjoying
high return on investment in manufacturing and other sectors and they dont have experience of
services. The return on investment is low in the services sector. The financial health of the company is
good enough. They have to get loan from the bank for the acquisition which will affect their financial
health.

Sime Darby was ranked number one in overall leadership, long term vision. Sime can involve
and respect the individuals and motivate them because employees can lead you or either
break you down. Sime was involved in various activities. Company has to focus on
employees so that to boost their morale and which ultimately leads to better financial results.
Company should provide proper training to the employees of all level they should provide
them incentives and future growth upon the ability of employees participation in his
respective job field. The employees should get some pension incentive after retirement. The
company should focus on the employee equity and their assets.

Decision criteria:
1) Company did not involve in risky manoeuvres 2) Conservative image of the company that
shows that they wont take money and run.

Decision:
Company will not acquire UMBC.

Recommendations:

Investors will need to perform a careful check on land status prior to acquiring a piece
of land to avoid possible land problems in the future. Based on the above National
Land Agency regulation, a plantation company must obtain a Location Licenses from
the Land Office prior to acquiring

Strategic Management
Sidra (15121016)

Rida (15121009),

The industry faces uncertainty in weather, price and also with tight regulation and
governance from non-government organization, SDP will be prepared to adapt to the
turbulence and ever changing situation of the market. A company with a good strategy
must make clear choices about what it wants to accomplish